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| Kathmandu, Monday March 17, 2003 Chaitra 03, 2059. |
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Gold prices keep on falling
Post Report
KATHMANDU, March 16: The domestic price of gold has fast
caught the receding trend. This may sound good to buyers, but gold dealers also say that
it would not have any impact on their sales, as off-season has already started.
"The next season is more than a month
away. The consumption capacity of locals has slid enough to trigger the business up in the
meantime," said office bearers of Nepal Gold-Silver Dealers Association (NGSDA). They
indicated that price upheavals would have no effect on the business. Currently, the market
is haunted by post-season silence.
The sales have declined by over 90 per cent
and existing business mostly comprise recycling of old ornaments, according to Tej Ratna
Shakya, President of the NGSDA. However, he was optimistic that the business would start
recovering over a week.
"Sharp downfall just after the passage
of a season is a regular feature of the gold market," he said, adding, "If the
next round of price hike is avoided, the business will definitely pick up." Shakya
predicted that ‘given the latest changes seen in the market’ gold price would
further slide by some 150 rupees per 10 grams in a week.
He argued that the market across the globe
has started exhibiting stability and, in fact, has caught recovery trend of late.
"This reduces the chances of gold price going up," he said.
Quoted prices of the precious metal on the
first day of the week for about last one and half months reveal that the fall in domestic
prices has been sharp. The plunge in gold price recorded today alone was of Rs 140 per 10
grams as compared to that of the last trading day, Friday.
Price quoted for gold trading on Sunday is Rs
8,660 per 10 grams, according to the NGSDA. This is a decline of Rs 340 per 10 grams in a
week’s time. Gold was traded at Rs 9,000 per 10 grams last Sunday.
The decline in domestic price, due largely to
plummeting demand of the yellow metal in the international market, has been recorded since
February 6, when the price touched the record high Rs 9,400 per 10 grams in Nepali bullion
market. Except for the last week of February, the price is more or less in a declining
trend.
The decline in international gold prices
kicked off after investors were convinced that the risk of war has been postponed, as
people knowledgeable to the matter said.
Experts said that the recovery made by major
stock markets across the globe of late was one of the major factors behind gold price
decline. Speculative investors usually reshuffle their portfolio between the gold and
share market due to which traditionally gold and share market maintain a negative and
opposite relationship.
Likewise, the US dollar has started rising
against major rival currencies in recent days, pushing the gold price down. Gold is
regarded as a safe haven for the international investors, especially at a time when dollar
starts sliding. Gold is priced in dollars in the world market.
The international price of gold plunged by
over US$ 20 in just a week. On Friday, gold closed in London at US$ 337 per troy ounce.
Though it was an upsurge of US$ 1.60 compared to the closing price of Thursday, it was
said to have no far reaching effect.
In Hong Kong, gold price fell by US$ 9.25 to
US$ 334.80 per troy ounce on Friday. In the international market price has returned to the
value, which existed prior to the war threat, according to the NGSDA officials.
"But in Nepal it is still to come to normal level and
this provides ray of hopes for maintaining business till the next season arrives,"
said Shakya.
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